In this study, the prospect of using an Upflow Anaerobic Sludge Blanket (UASB) reactor for detoxification of process water derived from bioethanol production has been investigated. The bioethanol effluent (BEE) originated from wet oxidized wheat straw fermented by Saccharomyces cerevisiae and Thermoanaerobacter mathranii A3M4 to produce ethanol from glucose and xylose, respectively. In batch experiments the methane potential of BEE was determined to 529 mL-CH4/g-VS. In batch degradation experiments it was shown that the presence of BEE had a positive influence on the removal of the inhibitors 2-furoic acid, 4-hydroxyacetophenone, and acetovanillone as compared to conversion of the inhibitors as sole substrate in synthetic media. Furthermore, experiments were carried out treating BEE in a laboratory-scale UASB reactor. The results showed a Chemical Oxygen Demand (COD) removal of 80% (w/w) at an organic loading rate of 29 g-COD/(L . d). GC analysis of the lignocellulosic related potentially inhibitory compounds 2-furoic acid, vanillic acid, homovanillic acid, acetovanillone, syringic acid, acetosyringone, syringol, 4-hydroxybenzoic acid, and 4-hydroxybenzaldehyde showed that all of these compounds were removed from the BEE in the reactor. Implementation of a UASB purification step was found to be a promising approach to detoxify process water from bioethanol production allowing for recirculation of the process water and reduced production costs.